Non-dom tax update
Following the end of the tax year on 5 April, many long-term non-doms (broadly speaking, those who have been UK-resident for 15 years) will be completing a tax return on a worldwide basis for the first time. Some points for them to bear in mind:
• the 2017/18 tax return is due by 31 January 2019, but better to deal with it early;
• all sources of income and gains arising both in the UK and outside the UK will need reporting;
• it may be possible to obtain relief for amounts which have suffered foreign taxes;
• where non-UK assets have been sold, they are likely to have been rebased to their value on 5 April 2017, thus reducing the taxable gain. If the asset is, say, a listed security, the market value will be easy to obtain. But for other assets, say property, a valuation may be required;
• where an individual is a settlor or a beneficiary of a non-UK trust or a shareholder in a non-UK company, it is important to ensure that no reporting is required;
• untaxed income or gains arising overseas before 6 April 2017 and brought to the UK will need reporting on the tax return.
Although non-UK income and gains arising in 2017/18 will be taxed in the UK, and so in theory can be brought there without further tax charges, great care is needed as there are very strict rules regarding transfers from non-UK bank accounts. Moreover, potentially helpful ‘unmixing’ relief is only available until 5 April 2019.
Source: Moore Stephens